1. Which of the following is FALSE?

Unlike financial accounting, managerial accounting provides data for internal users.

b. Unlike financial accounting, managerial accounting is required by law.

Unlike managerial accounting, financial accounting is subject to GAAP.

Unlike managerial accounting, financial accounting emphasizes the past.

2. Which of the following is FALSE?

Factory overhead consists of all indirect manufacturing costs.

Period costs are also known as nonmanufacturing costs or operating expenses.

Conversion costs consist of direct labor and factory overhead.

Direct costs are costs that are difficult to trace directly to a specific cost object.

3. Which of the following is FALSE?

A predetermined target cost that should be achieved is known as a standard cost.

Costs that have already been incurred are known as sunk costs.

Costs that remain constant in total regardless of changes in activity are known as variable costs.

Expected future costs that will differ between alternatives are known as relevant costs.

4. Depreciation on a machine used to manufacture soda is an example of

Period Cost

Direct Materials

Prime Cost

Conversion Cost

5. The cost of shipping a product to a customer is an example of

Direct Labor

Factory Overhead

Selling Expense

General & Administrative Expense

6. Which of the following is TRUE?

When you purchase materials, your Work In Process Inventory increases.

When you incur labor costs, your Finished Goods Inventory increases.

When you allocate overhead to products, your Work In Process Inventory decreases.

When you sell your products to customers, your Finished Goods Inventory decreases.

7. Which formula would you use to compute Cost of Goods Manufactured?

Beginning Raw Materials Inventory + Purchases Ending Raw Materials Inventory

Direct Materials Used + Direct Labor + Factory Overhead

Beginning Work In Process Inventory + Total Manufacturing Costs for Current Period Ending Work In Process Inventory

Beginning Finished Goods Inventory + Cost of Goods Manufactured Ending Finished Goods Inventory

8. Which formula would you use to compute Cost of Goods Sold?

Beginning Raw Materials Inventory + Purchases Ending Raw Materials Inventory

Direct Materials Used + Direct Labor + Factory Overhead

Beginning Work In Process Inventory + Total Manufacturing Costs for Current Period Ending Work In Process Inventory

Beginning Finished Goods Inventory + Cost of Goods Manufactured Ending Finished Goods Inventory

9. Which of the following statements is FALSE?

Total fixed costs may change between relevant ranges.

Total fixed costs are constant within each relevant range.

Variable cost per unit is constant within each relevant range.

Total mixed costs are constant within each relevant range.

10. As volume increases,

fixed cost per unit increases

variable cost per unit increases

fixed cost per unit decreases

variable cost per unit decreases